Staying on top: How payroll can become less complex and lead management decisions
As legislation and compliance compound the complexities around HR and payroll for practitioners, technology is creating opportunities to make HR processes simpler and more authoritative in decision-making.
Recent research of more than 1 000 small and medium enterprises revealed that 93% of small and medium enterprises in South Africa say recruitment and resourcing should be at the heart of growth over the next five years.
The same research, conducted by Sage Accounting, also showed that 85% agree that HR and payroll professionals deserve a seat at the senior management decision-making table.
With access to sensitive and valuable information, payroll and human resources professionals are sitting on a goldmine of insights that can enhance business strategy, streamline compliance, and attract and retain the best talent. Without a specialist system however, those insights remain buried under an ever-growing pile of admin.
But there are at least three reasons why the tide is beginning to turn, highlighting the critical role that technology, HR and payroll will play in taking a business to the next level.
Getting to grips with complexity
The HR and payroll function is becoming increasingly complex due to changes in legislation, Covid-19 aftershocks and the move to hybrid working – particularly in terms of tax and compliance. While HR professionals need to focus on strategic concerns such as talent recruitment, development and retention, they are spending more of their time on compliance instead. Sage research indicated that 77% of SMEs consider payroll taxes complex, while 50% find it challenging to explain a tax calculation.
To remain compliant, payroll and HR professionals must understand the impact of legislative changes on processes and systems such as UIF and PAYE calculations, pension and medical aid fund contributions, and – a first for many in the profession – data security. Although 91% of payroll and HR professionals say their organizations are fully compliant with POPIA and the General Data Protection Regulation, 63% worry about securely sharing personal employee information and 48% still worry about compliance.
“For HR professionals to step up and take a more strategic role in the business, they need to tame the current challenges they face in administration and compliance,” says Yolandi Esterhuizen, Director: Product Compliance, Sage Africa & Middle East.
“This is where forward-looking HR and payroll departments see technology playing an increasingly vital role in their future. Those with accessible, integrated cloud-based platforms are already reaping the rewards.”
Attracting the best talent
Payroll and HR professionals are also spending a lot of time on manual, repetitive tasks and maintaining employee data. 30% of respondents said they spend a third of their day on manual repetitive tasks. They therefore have little time to take advantage of Employment Tax Incentives or to position the company as a desirable employer for Generation Z.
Younger generations expect more from employers regarding ethics, social responsibility, and social issues. These digital natives have very different expectations of work and how and where they do it.
Here, cloud technology is also playing a huge role in making talent management and engagement less complex.
Cloud technology can automate mundane tasks, improve reporting and compliance accuracy, support data security, and free up time to focus on things that make a real difference in the business. This can include maximizing ETI benefits to develop in-house skills, empower the youth, and position the company as a desirable employer.
“The most successful businesses will be those that embrace specialized technology to free up time to focus on understanding employee expectations, grasping the cultural benefits that will attract the best talent, and putting in place the systems and processes necessary to engage and retain that talent,” says Esterhuizen.
Making decisions
According to the research, 62% of HR and payroll professionals say that embracing technology and analytics should be a top priority for leaders.
Among the key areas respondents wanted payroll to simplify in order to focus on making leading business decisions, included automating tax calculations; integrating payroll, and centralizing records using cloud-based systems.
Specialist cloud payroll and HR systems, like Sage Payroll, offer all this, as well as ease of integration, online support, access from anywhere, and direct links to banks and tax authorities. Such systems streamline and automate processes, provide real-time employee and organizational data needed for better reporting, as well as analytics to inform strategy and planning.
“This equips teams with the real-time insight they need to make substantial contributions at boardroom-level discussions about strategy, data security to improve compliance, and a streamlined payroll process to reduce errors, cut costs, and increase employee satisfaction. In turn, this helps the organization harness its talent more effectively as a competitive advantage,” says Esterhuizen.
Cloud-based platforms like Sage Business Could Payroll Professional are the perfect tools to enable HR teams to reduce the clutter of admin, allowing them to focus on the business of leading employees at thriving companies. When used correctly, payroll and HR data can result in faster recruitment, lower staff turnover, and higher employee competency and engagement across the employee lifecycle.